The Bridge was estimated to cost about $77,000,000 for which the City was short already. The budget had been $21 million from the Feds, $48.5 million from borrowing, $5.8 million from capital budgets and $1 million from Tax Sale Lands Reserve.
The City got another $16.5 million from the Feds for the bridge, strangely just enough to cover the increase in costs of the project and then it comes out that the project is just about exactly $16.5 million over budget. I am trying not to cynical, but this really seems wrong. Someone either knew before the recent announcement of the new Federal funding for the bridge that the project was over budget, or the budget was raised to ensure that all the money was spent. If you remember last week I noted that even with this new federal money and a likely $100 million dollar cost to the bridge that there would still be a gap between what the City can do and what money is needed.
People in faovur of the bridge at the time said the Class C Estimate was peer reviewed and accurate. I work as a consultant and know how much flexibility there are in projections of numbers. Any well done estimate includes ranges of values for all the items and well noted potential risks. A well done estimate is prudent and assumes the worst. If you assume the best, or even the average, you were likely going to be disappointed.
It bothers me that this project is following the very predictable pattern of public sector capital projects - start with a low estimate, get approval, change the scope, revise the estimate upward once the work is under way. Bent Flyvbjerg at the University of Oxford has done a lot of work on this subject.
I have no faith that the $92.8 million figure is a final number and I think the City needs to be realistic at this point and plan for a $110 million bridge and figure out how it will be paid for. If the City can not make a $110 million budget work, it needs to stop the project and rethink the whole thing. If in the end only $100 million of $100 million is needed the City is doing OK, certainly much better than ending up at $100 million when you planned for $92.8 million.
The City Council is being given three options to consider,
- Design-Assist Delivery for $92.8 million - basically status quo
- Design-Build Delivery for $92 million - this model should offer some more cost certainty
- Design-Build with lower fixed budget $77 million - the scope of the bridge changes, much is lost
The argument for Option 1 is that it meets all the community values as raised in May 2010 in the Ipsos Reid survey. I think it is not reasonable to rely on that because the cost of the bridge has risen so much since then. I know the survey noted that cost was an issue. The argument is also that only Option 1 keeps the new federal funding securely in place.
This project over and over again seems to have been handled without a lot of forethought as to what is the best way forward. The City should have come forward from the start with a $100 million plan with the goal of a fixed price contract for the bridge. The design should also have been fully finalized before any physical work started.